The focus was on the defense team Tuesday at the fraud trial of former Starkey Laboratories executives as the lead FBI investigator was cross-examined and questioned about documents he had presented to the court.
Fired Starkey President Jerry Ruzicka, former human resources head Larry Miller and business associates W. Jeffrey Taylor and Larry T. Hagen are accused of embezzling from Eden Prairie-based Starkey $20 million in stock, bonuses, commissions and rebates. They have pleaded not guilty in U.S. District Court in Minneapolis.
Former Chief Financial Officer Scott Nelson and Jeff Longtain, who led subsidiary Northland Hearing, have pleaded guilty in the case.
The prosecution on Friday and Monday produced hundreds of documents to prove that the defendants made the transactions without owner Bill Austin's knowledge and then covered them up.
On Tuesday, the defense produced its own ream of documents as it tried to paint a different version and bring out discrepancies in the U.S. attorney's case while cross-examining FBI special agent Brian Kinney.
Under questioning, Kinney said there had been some mistakes in initial documents pertaining to the case, including those used to obtain search warrants.
Kinney later corrected those records, but in an early report he mistakenly wrote that Austin had a Starkey tape recording on which Ruzicka allegedly admitted in 2015 that he stole $10 million from the company. No such admission was on the tape. Instead, Kinney said, Austin had said the admission took place at a meeting at an Eden Prairie restaurant that wasn't tape recorded.
Ruzicka's attorney, John Conard, also told jurors Tuesday that the government's allegations about sham companies, faked commissions and millions in unauthorized bonuses and stock sales were false, because Austin knew and approved all financial transactions or gave Ruzicka permission to act accordingly.